Lessons 21 · 1 lessons · E. Sariqov, B. Khaydarov. Foundations of Economics, Grade 8. “Huquq va Jamiyat” Publishing House, Tashkent, 2019
21
Other factors that affect demand
Textbook: pp. 92–95
GoalLists the non-price factors affecting demand (taste and season, number of buyers, income, prices of related goods, expectations), tells normal from inferior goods and substitutes from complements, and finds the shift of the demand curve.
New words
normal good: one whose demand grows when incomes grow · normal tovarinferior good: one whose demand grows when incomes fall · past tabaqali tovarsubstitute: a good that satisfies the same need as another · o‘rnini bosuvchi tovarcomplement: a good used together with another · to‘ldiruvchi tovar
Explanation
Demand can change even if the price stays the same, and then the whole demand curve shifts. There are five groups of factors: taste and season (in summer demand for cold drinks rises, in winter it falls); the number of buyers (demand grows when the population grows); income; prices of related goods; and expectations of the future (if a price rise is expected, people buy more in advance). Goods whose demand rises when income rises are called normal; goods whose demand falls when income rises are called inferior (for example, cheap, low-quality goods). If the price of one good rises, demand for its substitute (tea and coffee) rises, while demand for its complement (printer and ink) falls. If demand grows the curve shifts right (D1); if it falls, left (D2). A price change, by contrast, is a movement along the curve, not a shift.
Worked examples
A cafe near school sells hot tea for 5 000 so‘m. In February it sells 120 cups a day, in April at the same price 70. The price did not change but the season did: the demand curve shifted left. Difference in daily sales: 120 – 70 = 50 cups.
A bicycle and its helmet are complements. After the bicycle price fell, more were bought, so demand for helmets also grew: the curve shifted right. Conversely, a bus ticket and a bicycle can be substitutes: if tickets get dearer, demand for bicycles rises.
Class activity
“Right or left?”: the teacher names a situation (for example, “the price of school uniforms has not changed but the new school year has started”); pupils show with their hands which way the demand curve shifts and explain the reason in one sentence.
Practice
1
How does a movement along the demand curve differ from a shift of the curve?
A movement is caused by a change in the good’s own price; a shift is caused by other factors (income, taste, expectations and so on).
2
What happens to demand for tea when the price of coffee rises? What kind of goods are tea and coffee?
Demand for tea rises; they are substitutes.
3
A neighbourhood had 1 500 buyers and after new houses were built it reached 2 100. By how many did the number of buyers grow?
600
4
Monthly income rose from 3 000 000 to 3 600 000 so‘m. By how many so‘m did it increase?